As Russia continues its war against Ukraine and the Trump administration reduces U.S. aid to Kyiv, European countries have stepped up their support of the Ukrainian people. But more can be done. At this critical moment, the European Union should seize the immobilized Russian sovereign assets that sit in Europe and use those resources to provide Ukraine with a sustainable source of assistance.
In February 2022, just days after Russia launched its full-scale invasion of Ukraine, the United States worked with the G-7 to freeze approximately $300 billion in Russian assets, the vast majority of which were held in Europe. Before the decision was made, some European countries raised economic and legal concerns, but they ultimately agreed. Over the course of the Biden administration—which both of us were a part of—the United States encouraged Europe to go one step further and seize Russia’s funds so that they could be put to use, as opposed to sitting frozen in accounts. But European leaders were unwilling to take this additional action: concerns similar to the ones raised several years earlier persisted.
Today, Europe should reconsider. The need to seize Russia’s sovereign assets is more urgent now than at any time since the war began. U.S. military aid deliveries to Ukraine from U.S. stockpiles, authorized during the Biden administration, will run out in the coming weeks, and the Trump administration has not announced renewed assistance for Kyiv. Russian President Vladimir Putin has rejected calls for a 30-day cease-fire and has stalled peace talks by making maximalist demands, presumably betting that Ukraine’s position will deteriorate as U.S. aid winds down and as China, Iran, and North Korea maintain their support for Russia.
Over the past three years, European countries have provided extraordinary support to Ukraine—more than the Kremlin ever expected. They have, for example, sent military and financial aid, implemented an unprecedented price cap on Russian oil, and enacted 17 sanctions packages against the Russian economy. But Europe will need to do even more to fill the void left by the United States. Europe cannot afford to see Russia triumph over Ukraine.
European leaders must increase support to Ukraine, but their citizens do not need to shoulder the cost alone. It is time to make Russia pay for the war it chose to wage. By seizing Russia’s assets, European governments can send a clear message to the Kremlin that support for Ukraine will persist. Such a move could transform Ukraine’s negotiating position and, ultimately, the trajectory of the war.
TO SEIZE OR NOT TO SEIZE?
After Russia began its assault against Ukraine in 2014, Moscow moved most of its sovereign assets out of the United States to reduce its exposure to U.S. retaliation. But Russia continued to store hundreds of billions of dollars’ worth of assets in financial institutions in other G-7 countries, believing, wrongly, that these governments would be unwilling to sanction Russian state funds. Now, approximately $300 billion sits frozen, mostly in Europe. That is a massive sum, considering that the United States and Europe have allocated about $282 billion in total aid to Ukraine since the start of the war, according to the Kiel Institute for the World Economy.
The Biden administration, in its final year, argued that the immobilized assets should be used to support Ukraine, but some allies remained reluctant. As the war continued, and as it became more challenging to secure additional congressional funding for Ukraine, U.S. President Joe Biden and other G-7 leaders reached a compromise. In June 2024, they agreed to provide Ukraine with approximately $50 billion in loans, paid back by the interest income earned from the immobilized assets. This was a meaningful step forward, but the time has come to use the full $300 billion to defend Ukraine against Russian aggression.
Some European officials have questioned the legal basis for seizing Russia’s assets, arguing that it would violate principles of sovereign immunity, which are enshrined in international law. But there are clear and compelling legal arguments in favor of taking Russia’s assets. As the UN General Assembly resoundingly affirmed in 2022, Russia’s invasion of Ukraine violates the prohibition against aggression, which is a legal obligation owed to all countries. Russia is flagrantly violating Ukraine’s sovereignty with impunity. As a permanent member of the UN Security Council, Moscow can block legal and diplomatic efforts aimed at stopping the conflict. Under these circumstances, seizing Russia’s sovereign assets is a legitimate countermeasure. This is one of the justifications the U.S. Congress cited for passing the Rebuilding Economic Prosperity and Opportunity for Ukrainians (REPO) Act of 2024, which allows the president to confiscate Russian sovereign assets. Canada, for its part, passed a similar law.
Putin believes that Ukraine’s foreign aid will eventually dry up.
Seizure is proportionate to the harm Russia has wrought, and because Russia has a legal obligation to pay Ukraine for damages from the war, seizure would be permissible in that it would set off Ukraine’s claim to reparations. As the former U.S. government officials Larry Summers, Philip Zelikow, and Robert Zoellick argued in Foreign Affairs, there is precedent for taking an aggressor’s assets: in response to Iraq’s invasion of Kuwait, the United States and its allies led efforts to transfer frozen Iraqi funds to an international escrow account to finance reparations.
European officials also worry that if they were to seize Russia’s assets, then managers of other sovereign wealth would be reluctant to invest in Europe. But there is no evidence that seizing Russia’s assets would cause investors to flee the continent. Investors did not leave when European countries froze the Kremlin’s assets three years ago, and the line between indefinitely freezing assets and seizing them is an incremental one. Fears of capital flight are overblown.
Today, in fact, seizure poses fewer risks to Europe’s economic and financial stability than at any other point during the war. Europe’s ability to generate growth and maintain its economic stability—especially as investors remain concerned by the economic uncertainty being exported by the United States—matter far more to asset allocators than the status of Russia’s sovereign assets. And the potential collapse of Ukraine is a much more significant threat to the European economy, because it could prompt massive Ukrainian refugee outflows and embolden Russia to threaten countries on NATO’s eastern flank. Using the sovereign assets would help strengthen Ukraine and prevent such a scenario from taking place.
EVERYONE WINS—EXCEPT PUTIN
The benefits of asset seizure far outweigh the risks. Without U.S. aid, European governments will be forced to support Ukraine largely by themselves—even as they invest in their own military stockpiles and prepare for their own increased security needs. Europe can use Russian assets to procure the weapons that Kyiv urgently needs, fund Ukraine’s innovative defense industrial base, and maintain the country’s macroeconomic stability. As part of this approach, European leaders should try to negotiate an agreement with the White House to purchase U.S. capabilities for Ukraine, starting with air defense missiles, with the understanding that the U.S. Department of Defense would prioritize these purchases given Ukraine’s urgent requirements. If successful, this model could be expanded to include other U.S. defense exports.
When a cease-fire is reached, Ukraine will still need sustained assistance for its military—so that it can deter future Russian aggression—and for the gargantuan task of reconstruction, which will cost hundreds of billions of dollars. Leaders of the G-7 have called on the Kremlin to pay for the damage it has caused, but Russia will never voluntarily finance Ukraine’s reconstruction. The only realistic way for Russia to make recompense is for Europe to put Russia’s assets toward helping Ukraine defend itself in the near term and rebuild over the long term.
There is also a diplomatic purpose to asset seizure. Putin believes that time is on his side in this war and that, eventually, foreign aid for Ukraine will dry up. Unlocking the $300 billion could change Putin’s calculus. That money would enable Europe to support Ukraine for years to come, with few domestic political costs, the specter of which could help bring Putin to the negotiating table. Ukraine, with this long-term support in hand, would have more leverage in negotiations and would be better positioned to reach a just and sustainable outcome to this war.
The debate over whether to seize the sovereign assets, therefore, must progress from the theoretical to the practical. An important first step is for the European Union to pass its own version of the REPO Act, which will give member states the ability to seize and use Russia’s assets at a time of their choosing. If the EU is unable to achieve consensus, then individual member states with Russian assets in their jurisdictions should take steps in their own national systems to enable seizure. With this authority in hand, European leaders should then develop and implement a plan to deploy the assets in support of Ukraine’s military and economy.
The war in Ukraine is at an inflection point: U.S. support for Kyiv is receding; Moscow is continuing its invasion, with the help of Beijing, Pyongyang, and Tehran; and Putin is betting that his position will improve with time. European countries can shift these dynamics, provide Ukraine with a lasting source of support, and persuade Putin to engage in meaningful negotiations. U.S. President Donald Trump has repeatedly argued that Ukraine “has no cards” in peace talks. But with Russia’s sovereign assets, Europe holds a card of its own. Now is the time to play it.
Loading…
